Correlation Between Zillow Group and Cadiz
Can any of the company-specific risk be diversified away by investing in both Zillow Group and Cadiz at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Zillow Group and Cadiz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zillow Group Class and Cadiz Inc, you can compare the effects of market volatilities on Zillow Group and Cadiz and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zillow Group with a short position of Cadiz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zillow Group and Cadiz.
Diversification Opportunities for Zillow Group and Cadiz
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zillow and Cadiz is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Zillow Group Class and Cadiz Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadiz Inc and Zillow Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zillow Group Class are associated (or correlated) with Cadiz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadiz Inc has no effect on the direction of Zillow Group i.e., Zillow Group and Cadiz go up and down completely randomly.
Pair Corralation between Zillow Group and Cadiz
Taking into account the 90-day investment horizon Zillow Group Class is expected to generate 0.79 times more return on investment than Cadiz. However, Zillow Group Class is 1.27 times less risky than Cadiz. It trades about -0.01 of its potential returns per unit of risk. Cadiz Inc is currently generating about -0.06 per unit of risk. If you would invest 5,017 in Zillow Group Class on January 25, 2024 and sell it today you would lose (674.00) from holding Zillow Group Class or give up 13.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zillow Group Class vs. Cadiz Inc
Performance |
| Timeline |
| Zillow Group Class |
| Cadiz Inc |
Zillow Group and Cadiz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zillow Group and Cadiz
The main advantage of trading using opposite Zillow Group and Cadiz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zillow Group position performs unexpectedly, Cadiz can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cadiz will offset losses from the drop in Cadiz's long position.| Zillow Group vs. Pinterest | Zillow Group vs. Snap Inc | Zillow Group vs. Spotify Technology SA | Zillow Group vs. Twilio Inc |
| Cadiz vs. Middlesex Water | Cadiz vs. SJW Corporation | Cadiz vs. California Water Service | Cadiz vs. The York Water |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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